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Tuesday, March 21, 2023

Banknote printer expects volume dip

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De La Rue, which prints notes for the Bank of England, expects a 20 per cent volume drop this year

The world’s biggest banknote printer says its volumes are set to drop 20% this year after a production crisis which involved staff allegedly fudging quality-control paperwork.

De La Rue, which prints notes for the Bank of England and more than 150 national currencies, said the production woes, which led to the resignation of chief executive James Hussey, cost the group £35 million but the impact on its full-year results was still unclear.

The group claimed earlier this year some employees falsified paper specification test certificates for some banknote customers after an investigation into production failures at a plant in Overton, Hampshire.

While De La Rue has concluded its own inquiry, an investigation by the Serious Fraud Office is ongoing and the company said it was not in a position to comment further.

De La Rue suspended production and shipment of the affected banknote in July for two months while the matter was investigated, which hit overall volumes, but the firm said it was encouraged by the level of orders in recent weeks.

The group posted a 57% rise in pre-tax profits to £69.4 million in the six months to September 25, after the hit from the production issues was offset by the sale of assets and the closure of a pension scheme.

Shares slumped 12% after Tuesday’s update.

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